Arbeitspapier
The Role of Card Acceptance in the Transaction Demand for Money
The use of payment cards, either debit or credit, is becoming more and more widespread in developed economies. Nevertheless, the use of cash remains significant. We hypothesize that the lack of card acceptance at the point of sale is a key reason why cash continues to play an important role. We formulate a simple inventory model that predicts that the level of cash demand falls with an increase in card acceptance. We use detailed payment diary data from Austrian and Canadian consumers to test this model while accounting for the endogeneity of acceptance. Our results confirm that card acceptance exerts a substantial impact on the demand for cash. The estimate of the consumption elasticity (0.23 and 0.11 for Austria and Canada, respectively) is smaller than that predicted by the classic Baumol-Tobin inventory model (0.5). We conduct counterfactual experiments and quantify the effect of increased card acceptance on the demand for cash. Acceptance reduces the level of cash demand as well as its consumption elasticity.
- Sprache
-
Englisch
- Erschienen in
-
Series: Bank of Canada Working Paper ; No. 2014-44
- Klassifikation
-
Wirtschaft
Demand for Money
Multiple or Simultaneous Equation Models: Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
Survey Methods; Sampling Methods
- Thema
-
Bank notes
Econometric and statistical methods
E-money
Financial services
Kreditkarte
Geldnachfragetheorie
Bargeld
Konsumentenverhalten
Elastizität
Schätzung
Österreich
Kanada
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Huynh, Kim P.
Schmidt-Dengler, Philipp
Stix, Helmut
- Ereignis
-
Veröffentlichung
- (wer)
-
Bank of Canada
- (wo)
-
Ottawa
- (wann)
-
2014
- DOI
-
doi:10.34989/swp-2014-44
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:46 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Huynh, Kim P.
- Schmidt-Dengler, Philipp
- Stix, Helmut
- Bank of Canada
Entstanden
- 2014
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